RESEARCH ALERT-Kim Eng starts CapitaMalls Asia as buy

SINGAPORE Feb 8 (Reuters) - Kim Eng Securities began coverage of Singapore's CapitaMalls Asia Ltd, which develops shopping malls, with a buy rating and set a target price of S$1.92.

By 0240 GMT, CapitaMalls Asia shares were up 1.8 percent at S$1.42 and have gained about 26 percent so far this year.

STATEMENT:

CapitaMalls' shares have fallen 34 percent from its initial public offering price of S$2.12, said Kim Eng, highlighting that its poor performance was due to its exposure to China and the lack of significant income streams from the country.

However, the brokerage said it believes CapitaMalls has the expertise to succeed in China over the medium to long term, and estimates that core earnings contributions from the country will grow to 54 percent in 2016, from 7 percent in 2010.

Kim Eng said it expects CapitaMalls Asia's earnings to grow by 18 percent on average each year over the next five years as income from its shopping malls start to stabilise. (Reporting by Charmian Kok; Editing by Anshuman Daga)